LONDON, Sept 5 The euro struggled to regain a
footing on Friday after suffering its biggest daily fall in
almost three years on the back of a surprise cut in official
euro zone interest rates.

The single currency plummeted 1.6 percent on Thursday to a
14-month low of $1.2920 after the European Central Bank
cut rates to new record lows and launched an asset purchase
programme to ward off deflation.

Upbeat data from Germany on Friday, showing industrial
output in the euro zone's biggest economy increased by the most
in almost 2-1/2 years in July, failed to boost the euro, which
was down 0.1 percent on the day at $1.2936.

ECB Governing Council member Ewald Nowotny said in an
interview with Austrian broadcaster ORF on Thursday that the
central bank cut interest rates in part to help weaken the euro.

"If the primary reason for the ECB deposit rate cut
yesterday was to weaken the euro, it has been successful," said
Chris Turner, a strategist with Dutch bank ING in London.

"The euro is very oversold against the dollar, but any
correction to the 1.2980/3020 area looks a sell probably for a
September move to the 1.2650/2750 area."

Nowotny added that a euro/dollar rate around $1.30 or
slightly lower was "going in the right direction" but declined
to say where he would like to see the euro.

Though the ECB's announcements came as a shock to most, some
had been hoping that the ECB would signal that it was moving
towards full-scale quantitative easing - effectively the
printing of money.

"The thing that concerns me going forward is a lot of
disappointment surrounding the decision," said Neil Mellor, a
currency strategist at Bank of New York Mellon.

"That might seem a strange thing to say given that the
measures were designed to target a weaker euro, but within the
price there is still some assumed element of full-blooded QE and
that seems to be as remote as ever so I do wonder about the
risks of a rebound higher (for the euro)."

With most markets settling in to await monthly U.S. jobs
data later, the biggest falls in early European trade were for
the Norwegian and Swedish crowns, which fell respectively 0.2
and 0.25 percent against the euro after another round of poor
Swedish economic numbers.

The crown, under pressure in recent months from a
deteriorating outlook on inflation and growth, slipped from
9.1430 crowns per euro to a day's low of 9.1700 crowns after
industrial output fell on both monthly and annual terms.

DOLLAR STRONG

The drop in the euro helped give a boost to the dollar and
its index set a 14-month high of 83.943 earlier on
Friday. It last stood at 83.831, steady on the day.

Against the yen, the dollar touched a near six-year high of
105.71 yen. The dollar last traded at 105.305 yen, up 0.2
percent from late U.S. trade on Thursday.

Hopes for a highly anticipated asset reallocation by Japan's
Government Pension Investment Fund (GPIF) continued to weigh on
the yen, according to Bart Wakabayashi, head of foreign exchange
for State Street Global Markets in Tokyo.

"It's not just a dollar-buying market. There's a solid story
on the other side too, and that makes it easier to buy the
dollar against the yen," Wakabayashi said.

Data on Thursday provided fresh evidence that the U.S.
economy was on track for sturdy growth in the third quarter.

Analysts expect U.S. nonfarm payrolls numbers later on
Friday to show the pace of job creation picked up slightly in
August, with a rise of 225,000 jobs on nonfarm payrolls.
(Additional reporting by Masayuki Kitano in Singapore and Ian
Chua in Sydney, editing by Mark Heinrich)

WASHINGTON, Dec 9 Aetna Inc's chief
executive denied on Friday that its withdrawal from some
Obamacare exchanges was in retaliation for government efforts to
halt its merger with Humana Inc, as he sought to
convince a federal judge to approve the deal.

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